The oldest of Generation Y are now staring 40 in the face. They have married later; had children later; had more time for themselves and more opportunities for travel, holiday and leisure; had easy access to credit from a far younger age than previously and, with the introduction of social media, a wider spectrum of people to “keep up with”.

Amongst all the positives of not settling for second best, foreign travel, festival rounds, technology and fashion, lurk some negatives that as time goes on are starting to bite. Whilst interest rates are low, house prices have made it far more difficult to buy a house. Rents are significantly higher and expectations mean that significant events such as weddings are far more lavish and expensive.

In amongst all of this, the behaviour of spending on lifestyle and borrowing for capital items has meant - increasingly it seems - that Generation Y is far less likely financially to have anything to show for their hard work at 40 than their Baby Boomer parents. At the same time formal financial education has yet to find a place in the UK education system and the savings culture of previous generations has not had the same impact in this one. So to quote an Australian adviser, many of Generation Y have never learned to “act your wage”.

The key to changing this is to develop new habits.

1. Work out where your money is going – there are a multitude of apps to set a budget and then track your spending and after all, knowledge is power they say;
2. Live within your means – when you know where it’s going, aim to have something left over and pay down debt, start saving and move on to investing;
3. Use pay rises, promotions and job moves wisely – these shouldn’t just be an excuse to spend more – before you get into the habit of spending that extra money, pay down debt and increase savings;
4. Get used to saving for it and not using credit for it – cut it up, pay it off and get a savings habit;
5. Those wonderful online lives that other people have aren’t real so give up trying to keep up;
6. Develop an investment habit – make it regular, start small and build it up as you go – time can do a great deal for you once you get started;

It’s not always easy as a member of Generation Y, nor is it for their parents. Figures show that increasingly “the Bank of Mum and Dad” is needed for that first house, whilst parents in Generation X are facing supporting children and parents for much longer than they had expected. So what Generation Y needs to do is to apply the same passion and drive to their finances as they do to their lifestyles and start planning and “acting their wage”.

This article is intended for general guidance only and should not be relied or acted upon as specific advice